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in the room: How do you license applications running in a virtual machine or in a Terminal Services session? Some users might assume that once they license Remote Desktop Services (RDS) -- formerly Terminal Services (TS) -- to run an application like Office, they're home free. Or they might think that because they've licensed Office on their work computers, they have a right to access it remotely.

But it isn't that simple.

Matching editions and versions TS and remotely accessed virtual machines (VMs) do not require licenses for Office. The application license lives on the machine where it's installed; it's on the machine that is accessing the remote session. If you wonder why this is, consider the amount of money Microsoft makes licensing one terminal server for Office versus what it makes licensing the 100 computers that access TS for Office.

And Microsoft is fussy about how closely the license for the local device must match the software running in TS or on a VM. It must exactly match the version, edition and language of the remotely hosted instance of Office, with one qualification -- the accessing device may have a more comprehensive version of a volume edition of Office. For example, a computer licensed for Office 2010 Professional Plus can access a remote instance of Office 2010 Standard.

Users who have an enterprise-owned mobile device that is licensed for Office through their company's Enterprise Agreement (EA) can relax. They should have the licenses they need. The company may have an EA that includes Office, and every computer the company owns is licensed for the product. Therefore, anyone using one of those computers is licensed to access a remote instance of Office from that machine.

It gets dicey, however, when an organization doesn't license the same version or edition of Office on all computers companywide and when users want to access Office on the corporate network remotely. The home computer or personal laptop may not have the license necessary to access the remote instance of Office.

So how do you legally license Office for remote access? The most expensive solution to this problem is to buy a copy of Office Professional Plus for your desktop or portable computer through Microsoft's Open License program. This costs $508, but there are several cheaper options you may be able to use.

Primary user rights According to Microsoft's licensing rules, the primary user of a device licensed for Office can access an instance of Office running on that device from any other device -- regardless if the other device is licensed for the application.

In this free option, instead of running Office on a terminal server or on a VM in the data center, you host the remote session on the employee's work computer. The user connects to that machine through a virtual private network (VPN) and then connects to the computer in the office. This allows workers to remotely control their desktops.

There are several advantages to this method. You don't need a TS Client Access License (CAL), and you don't need to dedicate a server to remote users. In addition, performance is better because, unlike a terminal server that may be juggling dozens of user sessions at a time, the user's computer isn't doing anything else. It's simply being asked to do the same thing remotely that it does when the user is physically at the computer.

Office Web AppsOffice Web Apps -- introduced with SharePoint 2010 -- are lightweight, browser-based applications that can access Office documents stored on a SharePoint Server. The primary user of a computer licensed with Office 2010 or Office for Mac 2011 can access Office Web Apps not only from his licensed computer, but also from any device.

While Office Web Apps aren't the traditional TS experience, they may suffice for viewing, editing and creating corporate documents. And although these applications do have certain limitations, they are rapidly improving and are worth investigating.

In addition, Office Web Apps don't require a TS CAL, although the primary user or device needs a SharePoint CAL. You also need to be licensed for Office 2010, which is unfortunate because Office Web Apps have no connection to the Office installed on a PC. They're SharePoint applications, so someone with Office 2007 or even Office 2000 could use them.

Remember, though, if your company has an Enterprise Agreement that includes Office, you're licensed for Office 2010 and can use Office Web Apps even if you're running an older version of Office on the computer.

Portable device rights Portable-use rights aren't well understood, and the connection to remote access may not be immediately apparent. If used correctly, however, they can save a company a lot of money.

If your work computer has a volume license for Office Standard or Office Professional Plus, Microsoft's rules say, "You may install a copy on a portable device for use by the single primary user of the licensed device."

In other words, if you have a desktop licensed for Office and a portable that isn't, install Office on it because the Office license on your desktop can be extended to the portable. And because it's licensed for Office, you can use it to access Office remotely.

More on Microsoft licensing

Note that while retail Office Professional licenses also have portable device rights, they can't be used for remote access since you can't install a retail copy of Office on a server for remote access.Contrary to rumors, the portable device right does not require Software Assurance (SA) or an EA. It's in the basic software licensing terms for retail customers and in the Product Use Rights for volume-licensing customers. It's not dependent on your volume agreement.

One caveat is that if you have an EA, all portables and desktops used for your business must be counted in the agreement, and if your EA includes Office, you'll be buying Office licenses for each one. Therefore, portable-use rights are beneficial only if an employee owns his laptop, in which case he may be able to install Office on it.

But there is a way for a business to use portable-use rights to save money. Instead of licensing Office through an EA, which covers all computers in the organization, you can license it through a Select agreement, which lets you buy just enough copies to cover the desktop computers for any employees who use both a desktop and a portable device. Their desktops get the paid license via Select, and their portables get the free license via portable-device rights.

I calculate that if more than 15% of your users have both a desktop and a portable computer (owned by either the employee or the business). It's cheaper to purchase Office this way than through an EA.

Work at Home Licenses Work at Home (WAH) licenses are available in Select and EAs, and they allow you to use your home computer with the same kind of Office you use at work. They're not cheap, but at $220 (less in larger volumes) for Pro Plus or $148 for Standard, they amount to 60% off a second copy of Office.

That isn't bad, and WAH gets you both a copy of Office on your home machine and the right to access a remote instance of Office.

Interestingly, WAH is one of the few licenses for which you can't buy SA, even in an EA. It merely reflects whatever is installed on your work computer. If that computer has SA and you upgrade to a new version of Office, you can also upgrade your home computer.

Home use program Volume customers who add Software Assurance to Office can purchase another copy of Office for use on a home computer for about $12 through Microsoft's Home Use Program. That gets you properly licensed to remotely access Office.

This might seem like a better deal than a WAH license but SA on Office Professional Plus costs $100 to $150 each year. So this is an expensive way to get remote access from home.

One bonus, though, can reduce the pain: The home-use license has portable-use rights, so you can also install a second copy of Office on a laptop at home (for use by the primary user -- you can't give it to your kid to take to college).

ABOUT THE AUTHORPaul DeGroot is a writer, trainer, and principal consultant at Pica Communications, which specializes in Microsoft licensing strategies and policies.

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